Recently, more than half of the 8,323 childcare providers in Massachusetts were told they'll receive less money than they originally expected from the state in May and June.
This is due to adjustments to Commonwealth Cares for Children (C3) grant payments to remain within the state's budget allocation for fiscal year 2024, according to officials.
At Edward Street, we want early education and care providers in Worcester and its surrounding communities to understand the ramifications of the C3 grant cuts.
As part of our efforts, we're answering some of the biggest questions surrounding the C3 grant cuts and their potential impact on childcare providers, families, and children in Central Mass.
What Is the C3 Grant?
C3 grants were developed during the pandemic as a form of bedrock funding for early education and care providers to keep their businesses afloat during the height of the pandemic, according to Kim Davenport, Vice President of Initiatives & Aligned Programs at Edward Street.
The grants were designed to stabilize funding in childcare, helping providers pay staff salaries, mortgage and rent costs, and their day-to-day operational and workforce expenses, and a means to provide services during and after the pandemic given subsequent workforce challenges.
What Do the C3 Grant Cuts Mean for Childcare Providers in Massachusetts?
Critical lessons learned regarding the essential services of the early education and care industry to the wellbeing of the Massachusetts economy led Governor Maura Healey to approve a $56 billion FY24 budget, including $475 million in C3 grants from the Massachusetts Department of Early Education and Care (EEC) to serve children and families across the state.
That was an historic investment — a full year of funding for this essential grant program.
Unfortunately, funding is running out, leaving many providers to experience revenue reductions for May and June, the last two months of the fiscal year, with little advance notice to implement corrective measures.
To understand the financial impact of the reductions, consider the story of Melissa Cole, owner of Little Beginnings Preschool and Daycare, a private center in Shrewsbury serving 120 families.
When the pandemic hit, the C3 grant provided Little Beginnings with "the [financial] stability we never had" dating back to its launch in 1997, Melissa points out.
"My school survived and I survived because of the funding," Melissa says. "C3 gave us the solid ground we needed to focus on what is most important and not having to worry about keeping the lights on."
With the C3 grant cuts, Melissa's funding will be cut by 75% in May and June, leaving Little Beginnings with a $50,000 shortfall.
Like Melissa, many childcare providers have already accounted for the grants in their budgets.
Now, they're facing funding cuts — and have only a few weeks to figure out how to deal with them.
"EEC is working hard to protect the most vulnerable populations, given their budget challenge. Yet, it is set to leave providers operating on razor-thin margins behind," Kim says. "At this point in the year, budgets and expenses are deeply set. You can't just roll back staff salaries or rent."
Why Are C3 Grant Cuts Happening?
There's been "greater than expected growth" in demand for C3 grants over the past few months, according to EEC.
Or, in other words, demand for C3 grant funding exceeded EEC's budget, leading the agency to walk back on its promise to give childcare providers the money it initially said it would give them.
To make sure all childcare providers eligible for C3 grants can still receive some funding, EEC adjusted the monthly payments for some programs to stay within its FY24 budget parameters.
Is My Program Affected by the C3 Grant Cuts?
Possibly, depending on whether it meets certain criteria from the EEC.
Here's a look at EEC's categories for C3 grant funding changes:
No Change
Programs with enrollment consisting of 33% or more of children getting EEC childcare financial assistance, Head Start, and Early Head Start programs will continue to get the same monthly C3 grant payments.
Keep 55%
You'll keep 55% of your C3 grant monthly funding if your program's enrollment is made up of less than 33% of children getting EEC childcare financial assistance and serve at least one child getting this assistance.
Also, childcare programs operating in a highest social vulnerability index (SVI) community may receive 55% of their monthly funding. SVI is based on a community’s poverty and unemployment rate, income levels, and other economic and social factors. The highest SVI is 0.75 and above.
Keep 30%
If your program doesn't currently serve any kids receiving EEC childcare financial assistance but has a voucher agreement or contract for this assistance, you will get 30% of the C3 grant funding you initially received.
Additionally, you will receive 30% of this funding if you don't operate in a highest SVI community.
Keep 25%
You'll keep 25% of your regular C3 monthly grant payment if your program doesn't have any kids currently receiving EEC childcare financial assistance, a voucher agreement, or operate in a highest SVI community.
Is There Anything I Can Do to Stop the C3 Grant Cuts?
We can't stop the C3 grant cuts, but it's important to remember why they're happening in the first place and their potential impact on childcare providers, families, and children in Central Massachusetts and other areas of the state.
EEC wants to provide childcare providers with C3 grant funding. Because there has been tremendous demand from childcare providers for these grants, some recipients will get less funding than they initially received for the final two months of FY24.
Childcare providers can still pursue C3 grant funding for FY25 — and we encourage them to do just that.
Meanwhile, continued advocacy is key for childcare providers to get the C3 grant funding they expect, Kim says.
By staying up to date on C3 grant news and updates, you'll be well equipped to advocate for the childcare providers, families, and children who benefit from the funding.
What Does the Future Hold for C3 Grants?
Governor Healey previously announced in January 2024 that her administration would continue to offer C3 grant funding in FY25 as part of its "Gateway to Pre-K" agenda.
A chief concern is Governor Healey's request for C3 grant funding in the Commonwealth's FY25 budget was based on FY24's budget, when $475 million wasn't enough to meet the need.
To fully fund C3 grants in 2025, MassBudget estimated that line would need to be around $510 million when it first presented a formula adjustment to EEC for the end of FY24.
"The reality is that state revenues are down and hard choices may need to be made," Kim says. "We hope that the House and Senate can ensure the progress made through C3 funding can continue."
Let your legislators know how impactful this funding is to your community, its children and families, and to your local economy — Massachusetts runs on quality childcare!
Strategies for Children (SFC), a nonprofit organization committed to making high quality early education and care available to all Massachusetts children, is helping families ask state representatives to invest in C3 grants as part of the FY25 budget.
Click here to submit a letter to state representatives to invest in early education and care in the FY25 budget.
Is There Anything Else I Should Know About the C3 Grant Cuts?
EEC has put together an FAQ to help explain the potential impact of the C3 grant cuts on childcare providers in the Commonwealth.
At Edward Street, we continue to follow C3 grants and other initiatives that impact early education and childcare providers, families, and children in Central Mass.